City Risks Losing $2.4 Million in Former Hospital Debt Relief

Gov. Patrick

The city may be dipping into its rainy day fund after all. Governor Deval Patrick has placed on hold $2.4 million in state funds the city expected to use to defray debt payments on the former Hale Hospital.

Last week, city Councilors Robert H. Scatamacchia and Michael S. McGonagle expressed reservations over using $600,000 in unused abatement funds to reduce property taxes this year. Their fears may have come to pass.

“The $2.4 million is on hold. Should state revenues improve, it would be restored,” Colleen M. McGonagle, chief of staff to Rep. Brian S. Dempsey, told WHAV Monday. Dempsey is chairman of the powerful House Ways and Means Committee.

“Out of respect for the chairman (Dempsey), the governor chose to place a hold on the money. It would be one of the last things to disappear,” she said.

Gov. Patrick last week moved to offset the state’s projected $329 million revenue shortfall. Most of the budget cuts require legislative approval and Speaker Robert A. DeLeo has pledged to stop cuts to the local aid. “The Hale money is not considered local aid,” however, McGonagle said.

“I’m mad at Deval Patrick for taking away our earmark for the Hale Hospital,” Haverhill Mayor James J. Fiorentini said Saturday on a Lowell-based talk radio program. At the time, the mayor did not elaborate and did not return telephone calls or emails by deadline.

Dempsey has delivered more than $16 million to the city since the former city-owned hospital went deep into debt and was sold. Typically, the city has drawn down the state money once the city passed a budget and once the governor signs the state budget. The city passed its $168 million budget in June and Patrick signed the state budget in July.

Meanwhile, McGonagle said state department heads would be consulted to determine exactly how much money could be cut.

“When there is a gap this big, no one is safe. Brian is confident once revenues go up… we’ll have the opportunity to secure and lift the hold,” she said.

5 thoughts on “City Risks Losing $2.4 Million in Former Hospital Debt Relief

  1. I just received the actual numbers from Mr.Gullo regarding the difference between the property taxes with and without the $600,000 and want to correct what I wrote above regarding these numbers. The benefits are about $27 for average residential and about $98 for average commercial property.

    • Well, if the $2.4 million is not sent our way, the Mayor may have to go back to the council to change that tax formula. What I don’t understand is why we don’t plan 5 years out for these types of situations. Why wait until the bottom drops out ?

  2. I attended the meeting last week and from what I heard, I was not sure if it was a good idea to use the reserve fund of $600,000 to reduce taxes since the benefits of doing that to average homeowner was only about $29 but the benefits for average commercial property was over $1000 a year. I thought the impacts of those amounts on both groups would be small. Unfortunately, the City Council president didn’t invite comments from the public about using $600,000 in reserves to reduce the tax levy. We were allowed to comment only about the split of taxes between the residential and commercial property. If the hold on the $2.4 million debt relief is not lifted, then I suppose the city will have to borrow, which in turn will increase our tax liability in the future.

  3. Didn’t see this on the ET site. But then ;you can’t see much on the ET site, which is nothing more than click crap and continues the paper’s diminishing attention to Haverhill.

    By the way, if you reach your article limit, just clear the cookies from your browser (Chrome>settings>advancedsettings>privacy>clear browser data. Then select cookies and other site data and click clear broswer data again. Presto, a new set of views)

  4. Thanks to Councilor LePage for asking for the separate vote on the 600k at the meeting. That opened up the discussion about this money and the questions by Councilors McGonagle and Scatamacchia. Just think if we just assumed the Mayor was accurate on the initial assumption of the funding ? Transparency is a good thing right ?